Current projects to lift Gamuda earnings

By Sharen KaurPublished: 2009/12/18

MALAYSIA's second-biggest builder Gamuda Bhd (5398) expects its net profit and revenue for the current financial year to improve due to higher contributions from on-going construction works.

Group managing director Datuk Lin Yun Ling said one third of earnings will come from abroad. He expects half of earnings to come from overseas in 2011.

He said Gamuda has RM8 billion of outstanding orders and unbilled sales of RM700 million, which will be recognised in stages.

Unbilled sales would also double in two years as it has several future launches.
"We have enough on our plate to improve our performance," he said after the company's shareholders meeting in Shah Alam, Selangor, yesterday.

Last year, Gamuda made a net profit of RM193.7 million on a revenue of RM2.73 billion.

Its on-going projects are the RM12.5 billion double-tracking project in Malaysia and a development project in Vietnam worth RM2 billion.

It has contracts worth RM4 billion for the Sitra Causeway Bridges in Bahrain and the New Doha International Airport (NDIA) in Qatar.

Lin said the projects are progressing despite the debt crisis in Dubai.

"We are bidding for jobs at home and in the Middle East. We like highway, road, dam, port and airport projects with reasonable returns," he said.

Locally, Gamuda is eyeing the Pahang-Selangor interstate water transfer project, the Hulu Terengganu hydroelectric dam, the new Sepang low-cost carrier terminal and the extension of the Klang Valley Light Rail Transit.

Meanwhile, Lin said the shareholders of Syarikat Pengeluar Air Sungai Selangor Sdn Bhd (Splash) hope to resolve the sale of its water assets with the Federal government, amicably.

Gamuda and Kumpulan Perangsang Selangor Bhd hold 40 per cent and 30 per cent of Splash respectively. The rest is held by Sweet Water Alliance, controlled by Land & General Bhd founder Tan Sri Wan Azmi Wan Hamzah.

In July, the shareholders had agreed to sell the water-related assets and operations of Splash to the Selangor government for RM2.98 billion.

But the state aborted plans to buy all of Selangor's water assets for RM9.2 billion due to disagreements with the other concessionaire Puncak Niaga (M) Sdn Bhd.

The Federal government has stepped in and will announce its offer price for Selangor's water assets, via Pengurusan Aset Air Bhd, this month.

"The issue now is on pricing. There must be a win-win situation for the buyer and seller," Lin said.

He said the new offer should consider the RM1.5 billion invested by Gamuda so far and the potential income over the remaining 20 years of the concession.

"If the buyer feels he can tear the existing agreement, the matter will not be resolved," Lin said.